Itron Q3 Profit Rises on Wider Margins; 2026 Revenue Seen at $2.37-$2.385 Billion

Itron Inc. (ITRI) reported higher third-quarter revenue and profit as favorable business mix, operating efficiencies and cost discipline lifted margins, while growth in Outcomes and the contribution from its new Resiliency Solutions segment offset declines in its larger hardware and networked businesses.

Revenue for the quarter ended September 30 rose 3% year over year, including on a constant-currency basis, to $599.3 million. GAAP gross margin expanded 320 basis points to 40.9%, helping operating income increase 17% to $95.5 million. Net income attributable to Itron rose 9% to $71.4 million, while diluted earnings per share advanced 14% to $1.61.

On a non-GAAP basis, operating income increased 20% to $106.8 million and operating margin widened 250 basis points to 17.8%. Adjusted EBITDA rose 18% to $114.5 million, representing a 19.1% margin, up from 16.7% a year earlier. Non-GAAP diluted EPS increased 26% to $1.94.

Annual recurring revenue was $423 million. Itron said adoption of its Grid Edge Intelligence offerings continued to scale and described energy and water infrastructure modernization as a durable long-term trend.

Services and resiliency support growth

Outcomes revenue increased 9.4% to $92.2 million, driven by higher services revenue. Its adjusted gross margin rose 110 basis points to 40%, reflecting a higher-margin revenue mix and operating efficiencies, while adjusted operating margin improved 50 basis points.

Resiliency Solutions, established as a reporting segment at the end of 2025, generated $16.1 million of revenue. The segment, which includes Urbint and Locusview, posted an adjusted gross margin of 74.4% and an adjusted operating margin of 26.2%. Itron completed its acquisition of Locusview on January 5, 2026.

The company’s two larger segments recorded modest revenue declines. Networked Solutions revenue fell 1.1% to $389.5 million because of project deployment timing, though adjusted gross margin increased 250 basis points to 41.8% on favorable customer mix, operating efficiencies and cost management.

Device Solutions revenue declined 2% to $101.5 million, or 1.3% excluding currency effects, due to lower sales of legacy gas products. Favorable product mix and operating efficiencies helped raise the segment’s adjusted gross margin by 450 basis points to 35.4%.

Cash flow declines as backlog remains substantial

Operating cash flow decreased 13% to $102 million, and free cash flow fell 16% to $95.5 million. Itron attributed the decline in free cash flow primarily to working-capital changes, higher cash tax payments and lower interest income. Net leverage was 1.9 times as of September 30.

Third-quarter bookings totaled $482 million, producing a book-to-bill ratio of 0.80. The trailing-12-month ratio was 0.97, while ending backlog stood at $4.3 billion.

Full-year revenue expected near 2025 level

For the fourth quarter, management expects revenue of $621 million to $636 million. The midpoint would represent a 10% increase from the fourth quarter of 2025. Non-GAAP diluted EPS is projected at $1.70 to $1.80, down 29% at the midpoint from a year earlier. Itron said the midpoint would be 9% higher when normalized for tax rate and interest income.

For full-year 2026, the company expects revenue of $2.37 billion to $2.385 billion, with the midpoint up 0.4% from 2025. Non-GAAP diluted EPS is forecast at $6.72 to $6.82, down 5% at the midpoint on a reported comparative basis but up 14% when normalized for tax rate and interest income.

The outlook assumes a euro-dollar exchange rate of $1.13, a 22% effective non-GAAP tax rate and trade policies in place as of mid-October 2026.

Itron identified several uncertainties that could affect its results, including customer demand and order rescheduling, execution of restructuring and cost-saving plans, tariffs and trade-policy changes, foreign-exchange volatility, litigation, product warranty liabilities, acquisitions and adverse economic conditions.